Question 1

Beach City received a gift of corporate stock valued at $1,200,000 on the date of the gift. The donor specified that the principal amount of the gift be maintained in perpetuity, but that earnings can be used to acquire works of art to improve the appearance of public buildings. All changes in fair value are to increase or decrease the principal amount of the gift. Assuming that Beach City uses a permanent fund to account for the endowment and a special revenue fund to account for the earmarked earnings from the endowment, explain the accounting process for (1) receipt of the original gift, (2) receipt of quarterly dividends, (3) notification that fair value of the original stock increased by $3,000 during the year, and (4) the effect on fund balances of closing temporary accounts at year-end. (Note: Ignore the effects of the transactions at the government-wide level).

Accepted Answer

The answer of Beach City received a gift of corporate...

Question 2

Why might actual revenues and expenditures reported on the schedule of revenues, expenditures, and changes in fund balances-budget and actual differ from those reported on the GAAP-basis statement of revenues, expenditures, and changes in fund balances?

Accepted Answer

The answer of Why might actual revenues and expenditures reported...

Question 3

The following is a pre-closing trial balance for Sun City's General Fund as of June 30, 2020: 
  
What is the fund balance as of June 30, 2020, after all closing entries have been made?

Accepted Answer

The answer of The following is a pre-closing trial balance...

Question 4

Identify the four types of nonexchange transactions and discuss the rules for recognition of revenues and expenses/expenditures for each type of transaction.

Accepted Answer

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Question 5

During the current year, the Town of Salo Alto recorded the following transactions related to its property taxes:
1. Levied property taxes of $3,300,000, of which 2 percent is estimated to be uncollectible.
2. Collected current property taxes amounting to $2,987,500.
3. Collected $26,500 in delinquent taxes and $2,400 in interest and penalties on the delinquent taxes. These amounts had been recorded as Deferred Inflows of Resources in the prior year.
4. Imposed penalties and interest in the amount of $3,750 but only expects to collect $3,100 of that amount.  None is expected to be collected this year or within 30 days of year-end.
5. Reclassified uncollected taxes as delinquent. These amounts are not expected to be collected within the first 60 days of the following fiscal year.
Prepare the journal entry. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Accepted Answer

The answer of During the current year, the Town of...

Question 6

Select the appropriate term from the list that best matches to the definition.
A. Derived tax revenues
B. Exchange transactions
C. Nonexchange transactions
D. Imposed nonexchange transactions
E. Voluntary nonexchange transactions
_____ 1. Transactions in which the donor derives no direct tangible benefits from the recipient agency
_____ 2. A classification of nonexchange transaction, such as income or sales taxes
_____ 3. A category of nonexchange transaction that includes certain grants and entitlements and most donations
_____ 4. A category of nonexchange transactions, such as property taxes and most fines and forfeitures.

Accepted Answer

The answer of Select the appropriate term from the list...

Question 7

All revenues of the City of Capri are accounted for on the modified accrual basis. Below is shown a list of Capri's General Fund transactions of a revenue nature. State which ones should be recognized by the General Fund as a revenue in the year of occurrence. If any item is not a current revenue, state the proper treatment for that item.
1) Receipt of money from issue of tax anticipation notes.
2) Collection of taxes that had been written off in prior year.
3) Collection of current-year property taxes.
4) Collection of prior years' delinquent property taxes.
5) Receipt of money in prepayment of a property owner's next-year taxes.
6) Collection of accounts receivable for charges for services. Amount is included in deferred inflows of resources.

Accepted Answer

The answer of All revenues of the City of Capri...

Question 8

Why might the property tax revenue in a given year differ between the governmental funds statement of revenues, expenditures, and changes in fund balances and the governmental activities column of the statement of activities?

Accepted Answer

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Question 9

The following transactions occurred for the City of Fontaine's General Fund.
1. The budget prepared for the fiscal year included Total estimated revenues of $2,774,000 and appropriations of $2,693,000.
2. Encumbrances issued against the appropriations during the year were $931,000.
3. The current year's tax levy of $2,005,000 was recorded; uncollectibles were estimated as $65,000.
4. Collections of delinquent taxes from prior years' levies totaled $132,000; collections of the current year's levy totaled $1,459,000.
5. Invoices were received and approved for payment for items ordered in documents recorded as encumbrances in Transaction (2) of this problem. The estimated liability was $851,200. Actual costs were $850,500.
6. Revenue other than taxes collected during the year consisted of licenses and permits, $373,000; intergovernmental revenue, $400,000; and $66,000 of miscellaneous revenues.
7. Payments on Vouchers Payable totaled $1,505,000.
Prepare the journal entry. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Accepted Answer

The answer of The following transactions occurred for the City...

Question 10

During fiscal year 2020, the Town of Tonawanda issued purchase orders to various vendors in the amounts shown for the following functions of the town:
  
All goods ordered during the year were received at the following actual costs:
  
a. Prepare a summary journal entry in the General Fund general journal to record the issuance of purchase orders during fiscal year 2020. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
b. Prepare summary journal entries in the General Fund general journal to record the receipt of and payment for goods during fiscal year 2020. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Accepted Answer

The answer of During fiscal year 2020, the Town of...

Question 11

In what ways does the government-wide statement of net position differ from the balance sheet for governmental funds?

Accepted Answer

The answer of In what ways does the government-wide statement...

Quiz 4: Accounting for Governmental Operating Activities–Illustrative Transactions and Financial Statements

Why might actual revenues and expenditures reported on the schedule of revenues, expenditures, and changes in fund balances-budget and actual differ from those reported on the GAAP-basis statement of revenues, expenditures, and changes in fund balances?

The following is a pre-closing trial balance for Sun City's General Fund as of June 30, 2020: What is the fund balance as of June 30, 2020, after all closing entries have been made?

Identify the four types of nonexchange transactions and discuss the rules for recognition of revenues and expenses/expenditures for each type of transaction.

Why might the property tax revenue in a given year differ between the governmental funds statement of revenues, expenditures, and changes in fund balances and the governmental activities column of the statement of activities?

In what ways does the government-wide statement of net position differ from the balance sheet for governmental funds?